This is the secret of the most successful small businesses
Small businesses can benefit hugely from global trade, but they face many hurdles.
Image on top: REUTERS/Fabian Bimmer
In 2016, the World Trade Organization released an extensive report on small and medium-sized businesses. Its biggest revelation was how little we know about them.
SMEs, which employ most workers and account for 95% of all firms, are the lifeblood of the world’s economy. Yet they remain understudied, underappreciated and underserved, little understood even by the larger companies that count them as customers and suppliers. What’s more, they have been consistently ignored by negotiators writing international trade rules.
The WTO says SMEs – companies with fewer than 250 employees – have been “largely absent from the broad trade debate.” One result, it says, is that cross-border trade is more difficult and costly for smaller businesses than for larger companies.
Beyond that, the WTO study reads like a confession or self-indictment. “Relatively little is known about SME participation in trade, … their decisions to start exporting, or the benefits they may derive from internationalization,” the report says. “In the WTO context, SMEs have not figured very prominently over the years. A relatively small number of agreements have provisions that refer explicitly to SMEs.”